The tender process for Nakkaş-Başakşehir Motorway Project, which is part of the Northern Marmara Motorway on the European side of Istanbul, was launched by the General Directorate of Highways (“KGM”) on March 27, 2020.

Project Model and Contractual Structure 

The project model will be build-operate-transfer (BOT). The concession period is expected to consist of a fixed construction term and an operation term, which will be determined as a result of the tender process, as the bidder which proposes the shortest operation term will be awarded the tender. The concession agreement will be the Implementation Contract to be signed between KGM and the project company to be established by the successful bidder. In addition to the Implementation Contract, a separate agreement will be signed between KGM, the project company and the lenders to regulate the rights of lenders vis-à-vis KGM, such as step-in, substitution and KGM’s representations and undertakings. 

Traffic Guarantee 

The project is expected to benefit from a traffic guarantee to be provided by KGM as well as guaranteed minimum tolls for different types of vehicles, which are stated in the tender documentation and will also be provided in the Implementation Contract. The length of the motorway will be approximately 45 kilometers.

Debt Assumption by the Ministry of Transport and Infrastructure

Debt assumption basically refers to the assumption of the loan and financing costs by the State or the relevant public entity upon termination of the underlying concession agreement. As per the Build-Operate-Transfer Law No. 3996, the debt assumption undertaking in this project is given by KGM and the Ministry of Transport and Infrastructure.  

Current Status 

We, as Ergün Law Firm, have represented the Sponsors, including Rönesans Holding and Samsung C&T Corporation, in the EUR 1.1 billion financing of this project, which is the first project with debt assumption undertaking by the Ministry of Transport and Infrastructure, Republic of Turkey and KGM. The financing was provided by IFIs, IDBs and other financial institutions, including EBRD, Islamic Development Bank (IsDB), Islamic Corporation for the Development of the Private Sector (ICD), Asian Infrastructure Investment Bank (AIIB), Deutsche Bank, Standard Chartered, Natixis Corporate & Investment Banking, UBS and VakıfBank, and backed by the ECAs, including Atradius, The Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC) and SERV Swiss Export Risk Insurance.

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